Wednesday, 19 April 2017

Philip Hammond and RBS: Time to live in the “Real World”

Today’s short and reactionary post
is concerned with a recent statement made by the Chancellor of the Exchequer,
Philip Hammond, in which he told the British taxpayer, and essentially every
citizen, that ‘we
have to live in the real world’ with regards to the news that the U.K.
Government may be ‘forced’ to sell its stake in RBS at a loss. The troubled
bank, which the Government pumped £45 billion of taxpayer money into in the
wake of the Financial Crisis, has reported nine consecutive annual losses since it
was bailed-out and only recently posted a massive £6 billion loss, as
was discussed in Financial Regulation
Matters, in addition to the looming threat of a massive fine from the U.S.
Department of Justice, which some
suggest may be as high as $12 billion. So, in this post, we will follow
Hammond’s advice and ‘live in the real world’ – by assessing his performance
and stance, as well as the situation in this ever-changing and increasingly fractious
post-2016 world. For once, Philip Hammond is right – it is time to live in the
real world.

Philip Hammond, the man who
recently made the garish statement for us to live in the real world, is the son
of a civil engineer and a University of Oxford graduate, attending the
University at the same time as Prime Minister Theresa May did. He has had a
number of high profile endeavours in the business world, although
one in particular left creditors severely out of pocket. After graduating
from the University of Oxford, and making his multi-million pound fortune in
Construction, Hammond was elected as MP in 1997 for Runnymede and Weybridge,
and steadily made his way up through the ranks of the Conservative Party –
although he maintained his interest in his construction firm via an offshore
trust that the Cabinet Office has ruled does not
represent a conflict of interest. In relation to this, Hammond gave a wife
a stake in the business in order to reduce his tax expenditure, a fact which
one onlooker finds ironic that the ‘man who
has spent years working out how to most efficiently use the tax rules is now in
charge of crafting them. “He’s a poacher turned gamekeeper”’. Recently, in
his role as Chancellor, Hammond has been making waves for reasons which have a
distinct societal importance. Firstly, Hammond was exposed to an incredible
amount of criticism over his decision increase tax rates on the self-employed,
which saw
him almost immediately back down. Then, only a few days ago, it was stated
in The Independent that Hammond is
facing calls from his own party to backtrack on a four-year
freeze that his party placed upon working-age benefits, as the cap is now
set to hit almost 50% more claimants than he had originally envisaged. So,
taking Hammond’s advice and living in the real world, it seems only right to
conclude that he is not just a Chancellor of the Exchequer, but a
multi-millionaire from a privileged background who has conducted such an attack
on the poor of this country that even Conservative Party members are urging him
to relent – yes, the real world indeed.

In terms of RBS, the situation
could not be clearer. The bank, which sought to defraud investors with
despicable practices – investors, like pension funds and their members, that
make up many of the electorate that will go the polls in June – will likely be
returned to the marketplace after causing the taxpayer to suffer an incredible
loss. Removing ourselves from economic thought processes for just one moment,
the taxpayer bailed out a private company that had transgressed against them to the tune of £45 billion,
and now will not see the entirety of that money back and the bank will be free
to transgress again, safe in the knowledge that it will be rescued. The loss, which has already topped £1 billion and
will no doubt run into the many billions, comes at a time when we are told that
the NHS services in nearly
two-thirds of the country are being cut back, which a report
in the Journal of the Royal Society of Medicine recently blamed for causing
30,000 deaths in 2015 alone. According to a report
conducted on behalf of the Office of National Statistics, the U.K. has nearly 4
million people living in persistent
poverty – 16%
of the United Kingdom is classified in this manner. In addition to these
relative and incredibly distressing statistics, the Government, in responding
to the rapid increase in mental health issues affecting British citizens, has
cut up to £598 million from the relative budgets each year and this year added insult to injury by affording
just £15 million for ‘crisis cafes’.
These are just some, of the many
instances of what the ‘real world’ looks like so, yes, it is time to live in
it.

Ultimately, Mr Hammond’s call
should be exactly what is needed. The country goes to the polls in June after,
presumably, being subjected to a campaign trail that will focus on Brexit, not
hospital cuts. It will focus on ‘needing
unity’, and not how the most vulnerable in society have not only been
dismissed, but are actually seeing their positions attacked and the funding
that is supposed to help them extracted to cover the multi-billion pound support
that successive governments have
afforded to big business and the elite in society. This author urges anyone to
actually listen to Prime Minister’s Question Time (as the Prime Minister will not be making any other
public appearances on Television) and ask whether anyone has answers to
these pressing problems. In reality, Hammond alluded to a ‘real world’ in which
we must live, but, in truth, many of the country’s citizens do live in the real world and it looks nothing like the life that Mr Hammond
returns to every evening.

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